Embattled Crypto Exchange FTX Lent Billions in Customer Assets To Fund Alameda Research: Report

A brand new report claims that troubled crypto trade platform FTX lent billions of {dollars} price of its prospects’ property to fund its quantitative buying and selling department.

In line with The Wall Avenue Journal, FTX CEO and founder Sam Bankman-Fried told traders that Alameda Analysis owes FTX about $10 billion price of buyer funds.

The supply says that Bankman-Fried gave out loans to Alameda Analysis utilizing $10 billion out of the $16 billion in buyer deposits FTX had, a transfer the CEO described as a “poor judgment name.”

Bankman-Fried, who was additionally the CEO of Alameda Analysis till final yr, apologized earlier right this moment to his 930,000 Twitter followers in a prolonged thread, vowing that if FTX have been to outlive and proceed, it will be extremely clear.

He additionally famous that Alameda, recognized for its aggressive investing ways utilizing leveraged funds, would wind down its buying and selling exercise.

“In any situation during which FTX continues working, its first precedence might be radical transparency – transparency it most likely all the time ought to have been giving. Giving as near on-chain transparency as it may: so that folks know precisely what is occurring on it.”

Earlier this week, FTX confronted a liquidity disaster and collapsed, prompting Bankman-Fried to achieve out to Binance CEO Changpeng Zhao for a bailout.

Whereas Zhao initially agreed to assist, Binance finally backed out citing the US authorities’s ongoing investigations into FTX.

As acknowledged by Zhao,

“Because of company due diligence, in addition to the newest information stories relating to mishandled buyer funds and alleged US company investigations, we have now determined that we’ll not pursue the potential acquisition of FTX.

To start with, our hope was to have the ability to assist FTX’s prospects to offer liquidity, however the points are past our management or means to assist.”

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Featured Picture: Shutterstock/Tithi Luadthong

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